Negative Gearing Calculator

The Negative Gearing Calculator estimates rental-property deductions, net rental income, modeled tax effect, and after-tax out-of-pocket cost from rent, interest, other expenses, depreciation, and marginal tax rate.

$\text{Total deductions}=\text{Interest}+\text{Other expenses}+\text{Depreciation}$ $\text{Net rental income}=\text{Rental income}-\text{Total deductions}$

If net rental income is negative, the module estimates a tax effect as loss multiplied by marginal tax rate. If it is positive, the output labeled tax refund becomes a negative tax amount in the implementation.

Example

With $30,000 rent,$22,000 interest, $5,000 expenses,$6,000 depreciation, and a 30% marginal rate:

1. Deductions: $33,000.
2. Net rental income: -$3,000.
3. Modeled tax effect: $900.
4. Modeled after-tax loss: $2,100.

Questions

Does depreciation mean a cash expense?

No. Depreciation is a non-cash deduction in the model, so it can widen the tax loss without a matching cash payment.

Is the modeled tax effect guaranteed?

No. Deductibility and tax treatment vary by jurisdiction, property use, ownership, and tax year.

What is negative gearing?

It is a situation where deductible property costs exceed rental income, producing a modeled rental loss.

Limitations

This is an educational estimate and does not model capital gains, depreciation schedules, ownership structures, vacancy, state tax, or current tax law. Verify with a qualified tax professional.